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SCORE Business Adviser: Using illegal aliens carries many risks

By DON FORRER, Special to the Daily News
July 4, 2005

Question: I own a growing Southwest Florida business and I am concerned about the rising costs of labor. I am considering using the labor pool of illegal aliens in the area. What do you suggest?

Response: This is a growing issue throughout the United States and especially in Southwest Florida. It appears that every work crew that you see is composed of illegal aliens. However, if you are considering this option, you need to be very careful to consider the penalties if you get caught.

I discussed this issue with one of our International College graduate students, Kerri Hixson. Kerri is a bilingual probation officer and her caseload is composed predominantly of illegal aliens in Collier County. Her insight into the community provided valuable information that will help answer your question. I was amazed at the complexity of this issue.

First of all, there are both legal and ethical considerations when you contemplate hiring illegal aliens. Many of the men and women who form this labor pool come from very poor areas in their countries of origin and are working to send money home to their families. Unfortunately, one of the main reasons that employers turn to the pool of illegal aliens is to save money by cutting labor costs. When you hire an illegal alien, the worker is making very little for a difficult day's work.

Hiring illegal aliens speaks to the integrity of your organization. When you consider that the subcontractor may keep most of the money and pay workers very little for an extremely hard day's work, it is definitely a reflection on your company values.

One factor driving the use of this work force is a shortage in the pool of qualified workers. Additionally, affordable housing is becoming increasingly scarce in Southwest Florida. Therefore, American workers cannot afford to work for the wages paid to general laborers even under the best conditions. Hence, employers are turning to the work force that is available.

The United States Code (Section 8 USC 1324) states that "A person (including a group of persons, business, organization, or local government) commits a federal felony when he or she: assists, encourages, or knowingly helps an illegal alien regardless of the reason." Even though you hire a subcontractor and he or she brings the labor, you could be in violation of the law. When you consider this labor pool, you should thoroughly understand your liability.

An important consideration is that many illegal aliens are using bought or stolen identification documents to obtain employment in the United States. Labor laws are very clear when defining your responsibility for documentation of employees. Employees working under the cover of stolen identification documents cause problems in our Social Security and tax systems. Section 8 USC 1324 also states, "It is unlawful to hire an alien, to recruit an alien, or to refer an illegal alien for a fee." When you employ illegal aliens with working Social Security numbers or those obtained under the table, you are fueling this problem. Every worker in the United States is required to pay into Social Security and pay their share of federal taxes.

Illegal workers are hired in a variety of ways. There are many who gather at day labor hiring sites and employers drive by and hire them on the spot for a job. A popular method is to hire a subcontractor who hires illegal aliens and never questions where the workers came from. There are also migrant labor camps that usually employ laborers in the United States with a temporary work visa or often with no documentation at all. No matter how you obtain your laborers, it is imperative that you accept responsibility for the legality of your work force.

Hiring illegal aliens is like many issues that we discuss in this column. You can get by with this for a long time, but if authorities tighten enforcement, you will put your company in jeopardy. Additionally, you are relying on workers who may be drawing a fraction of the wages earned by U.S. workers. You must decide if you want to define your company in this manner.

The social problems caused by illegal aliens are well documented and a source of debate in our political process. Our hospitals and schools are challenged to meet the demands of this increasing population. This issue is now a hot item in the political arena. This will bring renewed publicity to the issue and probably more emphasis on enforcement.

The flow of illegal workers across our borders also provides opportunities for terrorists to hide among the group. I'm sure you don't want your company receiving the national attention and notoriety of the small airports training pilots after 9/11.

The best way to manage your company ethically is to hire the right people, pay a fair wage, and take care of your employees.

Don Forrer, D.B.A., is director of International College's MBA program. The Naples SCORE chapter provides free small business counseling to firms in Collier County. For an appointment or the schedule of free workshops, call 430-0081 or contact SCORE through its Web site at www.scorenaples.org. SCORE is sponsored by the U.S. Small Business Administration.